Venezuela Crisis Unlikely to Affect Oil Prices or India's Trade, Says Crisil
Crisil Ratings announced on Tuesday that recent political developments in Venezuela will probably not have any significant near-term impact on global crude oil prices. The rating agency explained that Venezuela holds a relatively small share of the world's oil supply.
Political Turmoil in Venezuela
A United States military operation captured President Nicolas Maduro on drug-related charges in early January. This event triggered uncertainty in Venezuela. The country possesses some of the world's largest proven crude oil reserves.
Limited Impact on Global Oil Prices
Crisil Ratings noted in a report that even if the situation escalates and disrupts crude oil production in Venezuela, the effect on global oil prices would likely remain limited. Venezuela accounts for only about 1.5 percent of global crude supply.
Brent crude prices have stayed largely stable in recent days. They are hovering just above 60 US dollars per barrel.
Minimal Impact on India
For India, the developments in Venezuela are unlikely to have any material impact on its global trade or the credit quality of Indian companies. Crisil said India's direct trade exposure to Venezuela is minimal.
Imports from the South American nation account for less than 0.25 percent of India's total imports. Crude oil makes up over 90 percent of the roughly 14,000 crore rupees imports in fiscal 2025. Venezuela supplies about 1 percent of India's crude oil requirement.
India imports nearly 85 percent of its crude oil needs and remains sensitive to global price movements. However, Crisil does not expect the Venezuela situation to have any near-term impact on oil prices.
Medium to Long-Term Outlook
Over the medium to long term, increased investment in Venezuela's large untapped oil reserves could boost global supply. This development might potentially soften crude prices, which would be positive for Indian companies.
Crisil stated, "While we do not anticipate any material near-term impact of the Venezuela situation on crude oil prices, investments for increasing crude oil production in Venezuela, which has vast untapped reserves, could boost oil supply globally and lead to softening of crude oil prices over the medium to long term, which could be a positive for India Inc."
India's Exports to Venezuela
India's exports to Venezuela were below 2,000 crore rupees in fiscal 2025. They accounted for less than 0.1 percent of total exports. These exports were diversified across several sectors.
- Pharmaceuticals
- Ceramics
- Textiles
- Two-wheelers
Pharmaceutical exports stood at about 900 crore rupees. This amount is less than 0.5 percent of India's total pharma exports. Other sectors recorded modest shipments of 80 to 120 crore rupees each.
Credit Profiles of Indian Companies
Crisil Ratings said it does not expect any material impact on the credit profiles of Indian companies with exposure to Venezuelan customers. This assessment is based on the limited scale of trade. The agency added that it will continue to monitor developments closely.
